Usha Financial Services is a Delhi-based lending company that does not take deposits from the public - it is an RBI-registered NBFC that raises its own funds and lends them onward, mostly to other financial companies and to small entrepreneurs the big banks often miss. It was founded in 1995, got its RBI licence in 2003, and listed on the NSE’s small-company platform in late 2024, all while staying deliberately small and capital-heavy, with a capital adequacy ratio more than three times the regulatory minimum. The recurring approach is simple: borrow from banks and bond markets, lend at a spread to borrowers whose cash flows are steady but whose credit needs are too small or too niche for mainstream lenders, and keep enough of its own capital on hand to absorb shocks - that is how it has built a book of over 13,000 borrowers across 30 states with just 45 employees. # Business segments Two lending engines, one large and one small - institutional credit to other NBFCs provides the bulk of the book, while a growing retail arm lends directly to micro-enterprises and individuals, with a green-finance product line just beginning to take shape. ## 1. Institutional lending: the wholesale engine that funds other lenders **UFSL lends to more than 100 NBFC partners, earning interest and fees on every rupee deployed - this is the business that carries the company.** - **Lender to lenders** - the company extends credit facilities to other NBFCs so they can strengthen their own liquidity and run their onward-lending programmes, while also lending to corporates for business expansion. In FY 2024-25, this segment alone disbursed close to ₹436 crore and generated roughly ₹40 crore in interest income plus another ₹3.5 crore in processing fees. - **A network, not a branch** - the institutional book is built on relationships with over 100 NBFC partners, a network that gives UFSL a diversified pool of borrowers without needing a large physical footprint. That is how a 45-person company can operate across 30 states. - **Fee income on top of interest** - every loan earns both interest and an upfront processing fee, so revenue is not purely dependent on the spread between borrowing and lending rates. ## 2. Retail lending: small-ticket loans to micro-enterprises and individuals **The company lends directly to MSMEs and individuals, with a deliberate tilt toward women borrowers in rural and semi-urban areas - a smaller book today, but the one it is building branches for.** - **Women-first micro-enterprise lending** - financial support is designed to help entrepreneurs meet working-capital needs and expand production capacity, with special schemes offered for women-led enterprises. As of March 2025, 80% of the company’s over 13,000 borrowers were women. - **Branch-led, not partner-led** - unlike the institutional business, retail lending runs through UFSL’s own branch network, which grew from a single branch in FY2025 to 15 branches by March 2026, with plans for 20 more in the following year. That physical presence lets it reach small-town entrepreneurs who have no relationship with a large NBFC. - **Unsecured today, secured tomorrow** - the current retail book is built on personal unsecured loans, but in March 2025 the board approved two new secured products: loan against property and project inventory funding. These will let the company lend larger amounts against collateral, changing the risk profile of the retail book. - **Co-lending expands reach** - the company is in the process of forging partnerships with business associates to explore co-lending arrangements, aiming to expand its presence in personal unsecured loan segments. - **Green and electric-vehicle financing** - a product line within retail that is still in exploration mode: the company is actively looking at opportunities in green mobility and clean-energy lending as part of its long-term growth strategy, and it uses the same co-lending partnership model to enter the segment. # Risk management and funding **The company funds itself through bank lines and privately placed bonds, then protects its book with a conservative capital cushion and a formal risk framework.** - **Borrowing from banks and bond markets** - UFSL’s bankers include ICICI Bank, State Bank of India and HDFC Bank, and it raises term funding through private placement of secured redeemable non-convertible debentures. A recent series carried a 12% fixed coupon paid monthly, secured by a first charge on identified receivables, with a four-year tenor - that is how the company locks in its cost of funds. - **Liquidity kept on hand** - the company maintains a liquidity buffer of roughly 8-10% of assets and keeps liquidity coverage above regulatory requirements, so it is not forced to sell loans in a crunch. - **Risk committee at the board level** - a formal risk management framework overseen by the board and its Risk Management Committee identifies and mitigates seven categories of risk, from credit and liquidity to operational and macroeconomic. Credit risk is handled through risk-based pricing, conservative loan-to-value ratios, and continuous monitoring including stress testing of the loan book. # Group structure and partners **A compact, family-run governance structure with three executive directors on a six-member board, supported by a small senior team.** - **Related-party connection** - a company called Tycod became a related party in September 2025; the Managing Director is a director of Tycod, and another director holds an 11% stake in it. - **Professional services** - the statutory auditor is M/s. Rajeev Shagun Gupta & Co., the secretarial auditor is M/s. Priya Binani & Associates, and the share transfer agent is Skyline Financial Services Private Limited.